cheesecake - All posts tagged cheesecake

Cheesecake Factory (CAKE) took a pie in the face. The restaurant chain’s share price fell more than 5% afterhours after earnings missed the company’s own forecast and revenue fell short of Wall Street estimates.

The earnings disappointment overshadowed a 17% dividend hike, and news that the company expanded its share repurchase program by 7.5 million shares to 48.5 million shares. Cheesecake Factory now plans to spend as much as $125 million buying back stock by the end of the year.

At $39.50, the shares fell $2.40 or 5.7% after the closing bell. Through Wednesday’s close at $41.90, the stock has risen 28% since the start of the year.

It’s been a rough week for rstaurant stocks, starting Monday when McDonald’s (MCD) released disappointing results. disapponted. Last week, Raymond James analyst Bryan Elliott unveiled last week an increasingly cautious stance on the wider restaurant industry citing rising evidence of a deterioration inspending in restaurants over the past four to six weeks. Elliott wrote:

With roughly 160 namesake restaurants and 15 Grand Lux Cafes, Cheesecake Factory has outperformed rivals by using its broad menu and upscale decor to shield its profit margin and improve customer traffic.

The company still expects to open as many as ten new restaurants during the current fiscal year, including a new namesake restaurant in the Middle East.

Nevertheless, its Grand Lux chain hasn’t been as initially expected, leading to some closures. Also, cutbacks in consumer spending and slow real-estate development amid a sluggish economic recovery have limited the company’s ability to open new restaurants quickly.

During the porevious quarter, Cheesecake Factory earned $28.6 million, or 52 cents a share, compared with $28.4 million, or 52 cents a share, a year ago. Excluding charges, earnings were 54 cents a share, compared to 51 cents a share last year, adjusted for proceeds from a variable life insurance contract.

In April, the company in April had said it expected per-share earnings between 55 cents and 57 cents.

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